On August 14, 2014, in Innovation Ventures, LLC v. N2G Distributing, Inc., the US Court of Appeals for the Sixth Circuit affirmed the US District Court for the Eastern District of Michigan's finding that the defendants , N2G Distributing, Inc. and Alpha Performance (collectively, N2G) and their common individual owner violated a permanent injunction enjoining them from selling products using marks that are confusingly similar to the plaintiff trademark owner's 5-HOUR ENERGY trademark and trade dress (No. 12-1635, (6th Cir. Aug. 14, 2014)).

In March 2008, Innovation Ventures, LLC sued N2G for infringing its registered 5-HOUR ENERGY trademark for energy shots and these products’ trade dress. At trial, a jury found that:

After the jury verdict, on May 23, 2012, the district court issued a permanent injunction prohibiting N2G and related parties from selling the infringing products. The injunction also barred N2G from selling products that used marks or trade dress that are confusingly similar to the 5-HOUR ENERGY trademark and trade dress.

In July 2012, Innovation Ventures discovered that N2G and related parties were continuing to sell the enjoined products and products bearing slightly modified versions of these products’ infringing labeling. On May 15, 2013, on Innovation Ventures’ motion, the district court held N2G in contempt of the injunction for selling both the enjoined products and the products bearing slightly-modified versions of the enjoined simulative marks and trade dress.

In holding N2G defendants and their principal in contempt, the district court did not conduct a likelihood of confusion analysis or rule that the modified products violated the Lanham Act. Instead, the court relied on the Safe Distance Rule in granting Innovation Ventures’ motion to hold the defendants in contempt.

On appeal, the Sixth Circuit explained that the Safe Distance Rule is simply a specialized name for the courts' broad equitable power to craft and enforce broad injunctions against recalcitrant or repeat offenders when these powers are exercised to protect intellectual property. Specifically, as in this case, courts can employ the rule to prevent repeat infringers from using otherwise noninfringing trade designations if these designations remain too close to the trademark owner’s marks or trade dress to dispel consumer confusion. The Sixth Circuit reasoned that the courts’ invocation of the Safe Distance Rule is appropriate where:

Finding no authority for N2G's arguments that the Safe Distance Rule applies neither to federal trademark cases nor to trade dress infringement, the Sixth Circuit noted that the rule is especially appropriate in this case, where a serial infringer made small changes to products specifically to skirt a permanent injunction.

The Sixth Circuit made clear that district courts have the authority to enforce injunctions against using “confusingly similar” trademarks or trade dress without conducting a full likelilhood-of-confusion analysis, subject only to appellate review under: